US, EU should ‘clean the house’ and deal with China – US ambassador

US President Donald J. Trump (R) meets with President of the European Commission Jean-Claude Juncker (L), in the Oval Office at the White House in Washington on 25 July 2018. [EPA-EFE/KEVIN DIETSCH / POOL]

Europe and the US should quickly sort out the current issues in their “long-term faithful marriage” so they can speak with “one powerful voice” and address China’s global activities, US ambassador to the EU, Gordon Sondland, said on Wednesday (3 September).

Speaking to a small group of journalists, Sondland said that concluding a trade deal with the EU – should, of course, help Washington turn its trade deficit with Europe into neutral “or even surplus”, but the real benefit would be the possibility to address the China issue.

“The jackpot [in concluding the trade deal] is having what is about $40 trillion combined GDP working as a bloc in terms of dealing with Chinese growth, Chinese theft of intellectual property, Chinese malign activity, Chinese militarisation in South China Sea, and all the other things we’ve been calling out to China to stop doing.”

Britain plans to send a warship to the disputed South China Sea next year to conduct freedom of navigation exercises, Defence Minister Michael Fallon said on Thursday (27 July), a move likely to anger Beijing.

“I think when we’re done cleaning our own house with the EU and have our act together, we can act as one voice and that’s a very powerful voice. That’s where the president ultimately wants to get to,” the ambassador said.

He said the US was willing to do “a wide open deal with the EU, no tariffs, no barriers, no subsidies, wide open on both sides, but that means no cherry picking either”. But he added that he did not think “political will is there yet on the side of the EU to do a deal like that, there are too many industries that have fences built around them”.

Despite the ongoing EU-US trade dispute, Sondland said there were “lots of technical talks going on as we speak, at a lower level… I would say that as we get into November and December we hope to see significant progress. The president is expecting it”. Asked if a deal should be reached before the end of this Commission’s mandate next year, he replied “Yes”.

“The sooner we conclude our business, the sooner we can both turn to the real opportunity, which is to deal with China and make China act like a good global citizen in the business world and otherwise.”

At the same time, China has been trying to build common positions with the EU against Trump’s protectionist policies.

China is putting pressure on the EU to issue a strong joint statement against US President Donald Trump’s trade policies at a summit later this month but is facing resistance, European officials said.

Help with investment screening

Sondland also said the US was offering its CFIUS programme, a very sophisticated screening tool, to the EU, which is also trying to put in place a similar programme to deal with investments.

“If you decide you want to sell an important business to the Chinese, you should go into that decision with your eyes wide open, you should not sell a business to someone you think is a Dane, or an American, and then find out there is Chinese money or control behind it.”

“Once you know, you have to make a decision and we obviously would not want to see critical assets or infrastructure, given their expansionist aspirations, in the hands of the Chinese. We would prefer to see them in the hands of friendlier actors,” he said, adding that it was up to Europe to decide whether to accept US help and then, when assessing a particular business deal, whether to approve it or not.

Regarding China, the EU has since recently tried to define strategies and defend its neighbourhood and business interests. EU foreign affairs chief Federica Mogherini recently unveiled what appears to be a reply to China’s Belt and Road initiative.

EU foreign affairs chief Federica Mogherini announced on Wednesday (19 September) the Commission’s vision on how to better connect Europe and Asia, in what appears to be a reply to China’s Belt and Road initiative, and also an effort to prepare the Asia-Europe Meeting (ASEM) in October.

Russia and Nord Stream-2

Turning to Russia, Sondland said things should be “turned up a notch”, but the issue of Nord Stream-2 pipeline should be addressed.

US President Donald Trump launched a strong verbal attack on Germany on Wednesday (11 July) for its support to the Nord Stream 2 gas pipeline, aimed at bringing more Russian gas to Germany under the Baltic Sea.

“When you have things like Nord Stream-2 in the mix, it makes it hard to turn up that pressure because Nord Stream-2 tends to enrich Russia, it tends to create inexpensive energy dependence on the part of Europe. But absent that, I think Europe and the US see eye to eye on many Russian malign activities that are occurring.”

He made clear once again the US administration “adamantly opposes Nord Stream 2 for one simple reason: it believes Nord Stream 2 does not provide for energy independence that Europe should and can have.”

“There is a misnomer out there, that our opposition to NS2 is nothing more than a sales gimmick to try to sell more US energy to Europe. While certainly, the US would like to sell more energy to Europe, that is in no way the president’s thinking. This is not about selling more LNG or anything else… This is about not putting Europe’s energy in the hands of those who might turn against Europe some day and curtail supply at the worst possible moment.”

“Whether Europe gets its energy from the US or from any other friendly actor on the globe, we don’t care. if the events that I describe were to occur, the US would have to step in and help. it is not because we have to, it’s because that’s what we do. We don’t want to put ourselves in that position by having Europe put itself in that position.”

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